Posted tagged ‘Companies Leave California’

Businesses Joined by Non-Profits in Leaving California for Friendlier States

September 21, 2017

Friends in economic development agencies and in the site selection consulting world have asked why I haven’t posted anything in quite awhile. My answer is simple: I’ve been exceptionally busy. It certainly isn’t because there aren’t things to write about.

Another question I’m usually asked is whether businesses are still leaving California.

They are, especially with the state legislature again failing to provide tax or regulatory relief to its home-state companies. Overall, taxes, fees and regulations have gotten worse. Such a difficult business environment, combined with grim treatment by local governments, have caused operating costs to grow faster in the San Francisco Bay Area and Los Angeles than in virtually every other metropolitan area in the nation.

So large corporations and small business entities – joined by non-profit organizations – continue to look for ways to partially or fully exit the state. Today alone brought two examples, which by coincidence both involve Nevada.

The first is a loss for Los Angeles with Virtual Guard, Inc. leaving the city’s Sherman Oaks section. The company plans to relocate its headquarters and interactive command and control center to Clark County (Las Vegas area), citing an “unfriendly economic environment” in California. The move is likely to occur later this year.

There, Virtual Guard  is expected to hire 80 new employees within its first two years of operations. The video monitoring company is also a developer and integrator of technology in the perimeter security sector and its solutions are being used throughout the United States and Canada.

California, which a long time ago was a haven for aerospace companies, will lose another one next year.

ERG Aerospace Corp. plans to relocate its Oakland operations to McCarran, Nevada and make the Silver State its headquarters. The company manufactures materials and components for the aerospace, national defense, semiconductor manufacturing, biotech and other high technology industries. The target date for the move is the second quarter 2018, with operations to commence in the same quarter.

Several months ago, a non-profit organization said it would relocate out of state, too. Horizon University, a private, Christian school that started classes in 1993 in San Diego is heading to Indianapolis.

Horizon’s President Bill Goodrich calls the decision “a no-brainer.” He said Indiana offers a “climate” that was slipping away in California, and by that he wasn’t referring to San Diego’s sunny days. Goodrich said that the university helps people “grow academically” while integrating the “strong biblical teachings and we find in Indiana, there’s an openness to that.”

The move will allow the, accredited university to grow on a 97-acre spread – in a state with less “red tape” – and attract more students.

Thanks to high costs, a sizeable non-profit move is upcoming: Toastmasters International will shift its headquarters from its birthplace in Orange County to Colorado.

With about 180 employees, Toastmasters CEO Daniel Rex said costs in California were a concern. “When you look at the availability of workers, when you look at the cost of commerce and real estate, this is something that makes sense.” The organization is spending $19.5 million to buy a building in Englewood, south of Denver. Toastmasters is a legendary California institution, founded in 1924 in Santa Ana. Since 1990 it’s been based in Rancho Santa Margarita.

Business people who endure the decline in California’s business climate and pervasive cost increases can take some comfort knowing that some non-profit brethren are members of the same club.

I’ll write more about how California treats its commercial enterprises. But first let’s see how many business-helpful bills and business-damaging bills Gov. Jerry Brown will sign into law.

One focus of this blog has been to address California’s perennially difficult business environment. Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow.

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Another Company Moves Headquarters Out of California – This Time it’s Irvine

February 11, 2017

AutoAlert, an Irvine, Calif.-based tech firm, announced today that it’s planning to relocate its headquarters to Kansas City, Missouri. The firm offers automotive software tools for management and communications.

missouri-state-sealWith plans to create 300 area jobs in coming years, AutoAlert CEO Mike Dullea said, “Our company is raising the bar to bring high paying tech jobs right to the heart of Kansas City. AutoAlert’s Kansas City headquarters will be operational in the spring of 2017. It seems the company is wasting no time in heading to the Midwest.

The firm will maintain an office in Irvine, the size of which is unspecified.[1]

“Just got off the phone with the CEO of AutoAlert,” Missouri Gov. Eric Greitens said in a release. “We had a great conversation. He told me that because of new policies like Right to Work, which show our commitment to growing our economy, they are excited to bring their business here and create jobs. This is what you sent me here to do, and I’m proud to say that we are getting results for you.”[2]

Dullea said, “As a tenured CEO I have never received such a personal call from a governor to thank me. The efforts and words of Governor Greitens say a lot about him and the type of leadership we can expect to see moving forward.”[3]

[1] Source: Bobby Burch, “Cali tech firm AutoAlert to create 300 Kansas City jobs, Startland, Feb. 10, 2017 http://www.startlandnews.com/2017/02/cali-tech-firm-autoalert-relocates-kc-creating-300-jobs/

[2] Source: Rob Roberts,”California tech firm will move HQ, create 300 jobs in downtown KC,” Kansas City Business Journal, Feb. 10, 2017 http://www.bizjournals.com/kansascity/news/2017/02/10/california-tech-firm-moving-hq-creating-300-jobs.html

[3] “AutoAlert Corporate Office to Move: Will Expand to Downtown Kansas City, Mo.,” news release, Missouri Department of Economic Development, Feb. 10, 2017 https://ded.mo.gov/content/autoalert-corporate-office-move-will-expand-downtown-kansas-city-mo

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One focus of this blog has been to address California’s difficult business environment.

Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow. Also, Joe has been a Keynote Speaker for more than 20 years – see A Speaker Throughout the U.S. and in Europe and Asia.

To Business Owners: Keep a Low Profile When Leaving California

January 25, 2017

Time and again I’ve encouraged smaller companies planning to escape California’s business-hostile environment to avoid publicly discussing their move. What follows is the story of an honest business owner expressing his legitimate concerns about operating in the state – and the unfortunate blowback that resulted.

city-of-los-angeles-sealHouman Salem, who owns a small apparel design and manufacturing business, wrote in the Los Angeles Times that higher labor costs are forcing him to leave California for Nevada. His article contained common sense, non-incendiary views:

“The biggest reason [to relocate] is the minimum wage, which will rise to $15 by 2021 in the county and by 2022 statewide. I write with some hesitancy, because I’m in no way an opponent of higher pay. When you have a company with fewer than 50 employees, you get to know them pretty well and have a genuine concern for them as individuals. But that has to be balanced with concern for keeping your clients, who can always take their business to other countries or states.”

He added, “When the $15 minimum wage is fully phased in, my company would be losing in excess of $200,000 a year (and far more if my workforce grows as anticipated). That may be a drop in the bucket for large corporations, but a small business cannot absorb such losses. I could try to charge more to offset that cost, but my customers – the companies that are looking for someone to produce their clothing line – wouldn’t pay it. The result would be layoffs.”

The reaction on social media was one of rage rather than reflection, according to Michael Saltsman of the Employment Policies Institute, writing in the Orange County Register:

“Good riddance,’ said one of the top comments on Facebook. ‘If you can’t pay your employees a living wage, you don’t have my sympathy,’ said another. Other comments accused Salem of being a bad businessman, of keeping too much money for himself and of exploiting his employees. Some readers even left negative reviews of his business online – even though they’d never met him or done business with him.”

Salem, the founder and CEO of ARGYLE Haus of Apparel, said he fears that the outraged reaction will discourage other affected businesses from speaking out and telling their own story.

He is correct. As a consultant who helps companies find business-friendly locations in which to locate, I encourage clients to keep a low profile. Otherwise, they will be hammered without mercy from an uninformed public and sometimes from public officials who know little about what it takes to run a business.

Publicly held corporations must divulge a relocation because that is considered a “material” event.  That is why within just a few years we’ve seen media coverage of many companies moving jobs out of Los Angeles County to out-of-state locations. Examples: Toyota, Hilton Hotels, Sony Pictures Imageworks, Occidental Petroleum, Northrop Grumman and Walt Disney Co.

Salem also said he is “contacted on an almost daily basis by other L.A.-based companies in my industry who are scared about the future. They are looking to me for leadership, and want to talk about my decision to leave the state.”

He added that “When politicians talk about an ‘economy working for everyone’ – let me tell you, it’s not working for the small business owner.”

Salem chafed at critics who suggested he’s taking advantage of his employees. He has always paid above minimum wage even though doing so causes increases in payroll taxes and workers compensation.

Saltsman wrote: “Despite the challenges of doing business in California, Salem (unlike some of his competitors) is still committed to making his products domestically. ‘I’m an American – I want this country to do well, to succeed….’ He told me he’s not opposed to raising wages – but that the entire burden can’t rest on small business owners. ‘I need the government to meet me halfway. In California, unfortunately, that kind of compromise doesn’t exist.’”

Other businesses have cited the minimum wage increase while loading moving vans, namely: California Composites of Santa Fe Springs when shifting work to Texas (the company owner said if he were to stay “it would probably make me a nonprofit within a couple years or so”); Competitive Edge Research & Communications that relocated from San Diego to Texas; and Woof & Poof of Chico, which makes handcrafted pillows and stuffed figures, when transferring work to North Carolina.

I noticed something about this event that adds insult to injury. Salem’s website states, “Based in the San Fernando Valley of Los Angeles, ARGYLE Haus is a founding member (emphasis added) of the L.A. Mayor’s Fashion Council, an organization dedicated to building and reinforcing the vibrant fashion and apparel industry in the greater Los Angeles area.”

A founding member? Have public officials shown any gratitude? Well, not that I know of from politicians like Gov. Jerry Brown, Los Angeles Mayor Eric Garcetti or any member of city council. I wonder if any of them think they could run ARGYLE Haus better than Mr. Salem has.

It’s hardly surprising that Salem concluded, “We need more stable, blue-collar jobs in places like the San Fernando Valley – the kind I thought I was helping create. California, however, has put up a giant ‘Go Away’ sign.’”

Mr. Saltsman’s Orange County Register column is here: “Los Angeles’ ungracious response to minimum wage consequences.”

Mr. Salem’s Los Angeles Times opinion column is here: “Leaving for Las Vegas: California’s minimum wage law leaves businesses no choice.”

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One focus of this blog has been to address California’s difficult business environment.

Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow. Also, Joe has been a Keynote Speaker for more than 20 years – see A Speaker Throughout the U.S. and in Europe and Asia.

Uber Regulations Mean San Francisco Loses While Phoenix and Pittsburgh Win

December 23, 2016

Any business person who has dealt with California’s frustrating laws, regulations and bureaucrats was nonetheless surprised to see a story with the headline, “Uber Ships Self-Driving Cars to Arizona After California Ban.”

uber-cars-on-flatbed-truckReally? A state ban on Uber? The poster child of the billion-dollar-plus startup, tech-guru, market-disruptor club? Why would Sacramento give Uber, of all people, a bad time?

Reuters said Uber Technologies Inc. pulled its fleet of self-driving cars from the streets of San Francisco and sent them to Arizona’s friendlier territory:

The California Department of Motor Vehicles banned Uber’s self-driving cars from San Francisco just days after they first deployed. In response, Uber picked up and moved out. “Our cars departed for Arizona this morning by truck, Uber said… . We’ll be expanding our self-driving pilot there in the next few weeks, and we’re excited to have the support of Governor Ducey.”

Gov. Doug Ducey wooed Uber on social media the evening when the ride-hailing company pulled its self-driving test from San Francisco. “California may not want you; but AZ does!” he wrote on Twitter. The next morning, Uber’s fleet was headed his state’s way.

California moved to revoke registrations for Uber’s automobiles, but Uber said its vehicles require oversight by a human driver and shouldn’t qualify under California’s autonomous-driving rules. Nonetheless, the state Attorney General and soon-to-be Senator, Kamala Harris (loyal to unions and hostile to business interests), threatened legal action if the company continued operating automobiles without a permit.

Uber in Arizona

Gov. Ducey’s full statement reads:

Arizona welcomes Uber self-driving cars with open arms and wide open roads. While California puts the brakes on innovation and change with more bureaucracy and more regulation, Arizona is paving the way for new technology and new businesses. In 2015, I signed an executive order supporting the testing and operation of self-driving cars in Arizona with an emphasis on innovation, economic growth, and most importantly, public safety. This is about economic development, but it’s also about changing the way we live and work. Arizona is proud to be open for business. California may not want you, but we do.

Anthony Levandowski, the head of Uber’s Advanced Technologies Group, argued that because the company’s self-driving system is an early prototype and requires test drivers to keep their hands on the steering wheel at all times. It’s no different from driver-assist systems already on the market — and those are exempt from the requirement for a California permit.

Levandowski said that it isn’t clear why the DMV is requiring a permit now when they’ve known that Ubers have been on the streets of San Francisco over a month and have been operating safely for months in Pittsburgh, “where policymakers and regulators are supportive of our efforts.”

Last year, Uber opened its Center for Excellence in Phoenix, where it serves U.S. customers and Uber users worldwide. Now, it seems that more development work will occur in Phoenix. That’s what happens when a state is friendly to business interests.

Uber in Pittsburgh

Uber has been successfully testing autonomous-driving vehicles in Pittsburgh for some time. An extensive Wall Street Journal story in September — Uber’s Self-Driving Cars Debut in Pittsburgh — described how Uber is turning the city into an “experimental lab” where it will have as many as 100 specially equipped Volvo XC90s operating. Also, reported the WSJ, the city has its quirks — like the “Pittsburgh left turn” — which makes it a great location for testing autonomous vehicles.

It is customary for the first driver at a stoplight who is signaling a left turn to have priority over oncoming traffic when the light turns green. People in the oncoming lanes generally allow that leftward dash and are puzzled or even angry if it doesn’t occur. Uber has programmed its cars to allow other cars to make the ‘Pittsburgh left’ but not to make it themselves. The city is also notoriously difficult to drive through with steep hills and three rivers that make streets twist and turn unpredictably… . “If you can drive successfully in Pittsburgh, you’re pretty much done,” said Ragunathan Rajkumar, a professor at [Carnegie Mellon University] who specializes in autonomous vehicles.

Last year Uber opened an Advanced Technologies Center in Pittsburgh and this year is developing its second research facility there as part of a massive brownfield redevelopment site. Uber says it likes Pittsburgh’s “world-class research universities and engineers and a thriving technology community.”

Uber entered into a strategic partnership with Carnegie Mellon University to help create its new technology center and also to rely on the university’s National Robotics Engineering Center to do R&D in mapping, vehicle safety and autonomy technology. Safety is one of Uber’s major concerns.

Uber also selected Pittsburgh because of the clustering of robotics companies such as Carnegie Robotics and RedZone Robotics.

Although California prides itself on the pool of technical talent found in San Francisco and Silicon Valley, Uber has found justification to praise Phoenix and Pittsburgh for the the talent available from local universities and the community support of technology and innovation.

Uber’s experience in San Francisco shows that venture capitalists, Ph.Ds in robotics and software engineers are no match for an all-knowing California bureaucracy.

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One focus of this blog has been to address California’s difficult business environment.

Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow. Also, Joe has been a Keynote Speaker for more than 20 years – see A Speaker Throughout the U.S. and in Europe and Asia.

 

More California Companies Hearing ‘Move to Our State’ Pitches

October 18, 2016

This proves that for every action there is a reaction: New measures by Gov. Jerry Brown and the California legislature that have worsened our business environment have boosted efforts by other states to recruit California companies to their friendlier locations.

Each visiting out-of-state representative outlines how a California company will benefit by relocating to one of their communities. Economic Development agencies also promote the advantages to California firms of placing future expansions in their areas.

california-precip-map-not-copyrightedAlthough no official records exist regarding recruitment activity in California by economic development organizations, I’ve experienced several hundred touchpoints from parties in far-flung locations wishing to discuss the state’s business environment.

California industries being targeted include financial services, manufacturing, robotics, software, e-commerce, food processing, aerospace, pharma and biotech, plastics, electronics, distribution and even family-owned dairy farms.

In the past, officials from a couple of agencies would contact me every month, but now it’s often two or three times per week.

The states with the highest California-related activity are Texas with 62 agencies, Indiana following at 22 and Arizona at 18. I define activity as visits, phone calls or direct-mail campaigns.

But the true level of activity is greater. For example, organizations in Texas, Nevada and Florida – and economic development agencies in Phoenix, Indianapolis and Pittsburgh – make multiple overtures in California.

The representatives are able to project significant operating cost reductions when it comes to labor, workers’ compensation, unemployment insurance, health care, taxes, facility leases or purchases, regulatory compliance and transportation. Affordable housing in other parts of the country also make it easier for companies to attract and retain employees.

Officials in other states follow activity in Sacramento where Gov. Brown enacted about 800 new laws this year, some of which will result in more regulations and higher tax and energy costs for California companies.

They also are struck by the unfairness of California’s new one-size-fits-all minimum wage law, which forces companies in low-cost areas to pay big-city wages as if they were located in the West Coast’s most expensive cities – Los Angeles and San Francisco. The legislature and Gov. Brown put businesses that face competition from foreign companies at quite a disadvantage.

Without a change in California’s political climate, I expect more inquiries to come in from states seeking to grow their economic base.

The identities of the 247 economic development entities that represent touchpoints with Spectrum Location Solutions are as listed below:

Alabama:

  1. Alabama Power, Mobile
  2. Baldwin County Economic Development Alliance, Robertsdale
  3. North Alabama Industrial Development Association, Decatur
  4. Power South Energy Cooperative, Montgomery

Arizona:

  1. Access Arizona, Casa Grande
  2. Apache Junction Economic Development Dept.
  3. Arizona Commerce Authority, Phoenix
  4. Arizona Public Service (utility), Phoenix
  5. Arizona Sun Corridor, Phoenix
  6. Avondale Economic Development Dept.
  7. Central Arizona Regional Economic Development Foundation, Casa Grande
  8. Gilbert Office of Economic Development
  9. Glendale Office of Economic Development
  10. Greater Phoenix Economic Council
  11. Mesa Economic Development Dept.
  12. Queen Creek Mayor
  13. Salt River Project (utility), Phoenix
  14. Scottsdale Economic Development Dept.
  15. Surprise, AZ City Manager
  16. Tempe Economic Development Dept.
  17. Wickenburg Regional Economic Development Partnership
  18. Yuma Economic Development Dept.

Arkansas:

  1. Office of the Governor

Colorado:

  1. Centennial Economic Development
  2. Colorado Springs Regional Economic Development Corp.
  3. Commerce City Economic Development Dept.
  4. Erie Economic Development Dept.
  5. Longmont Economic Development Partnership
  6. Metro Denver Economic Development Corp.
  7. Office of the Governor
  8. Westminster Economic Development Office

Florida:

  1. Brooksville-Tampa Bay Regional Airport
  2. Enterprise Florida, Orlando
  3. Florida East Coast Railway, Jacksonville
  4. Gulf Power, Pensacola
  5. Hernando County Economic Development Dept., Brooksville
  6. Jacksonville Port Authority
  7. Lake Wells Chamber of Commerce & Economic Development Council
  8. Manatee County Port Authority, Palmetto
  9. Office of the Governor
  10. Orange County Economic Development
  11. Orlando Economic Development Commission
  12. Power South Energy Cooperative, Miramar Beach
  13. Santa Rosa County Economic Development, Milton
  14. Sarasota County Economic Development Corp., Sarasota
  15. Petersburg Area Economic Development Corp.
  16. Tampa Bay Partnership, Tampa
  17. Tampa Hillsborough Economic Development Corp., Tampa

Georgia:

  1. Atlanta Economic Development Corp.
  2. Atlanta Economic Development Dept.
  3. Fayette County Development Authority, Fayetteville
  4. Georgia Dept. of Economic Development, Atlanta
  5. Rabun County Economic Development Authority, Rabun Gap

Idaho:

  1. Coeur d’Alene Area Economic Development Corp.
  2. Grow Idaho Falls Inc.

Iowa:

  1. Iowa Economic Development Authority, Des Moines
  2. Office of the Governor

Indiana:

  1. Bloomington Economic Development Corp.
  2. Carmel Community Relations and Economic Development
  3. Delaware County Economic Development Alliance, Muncie
  4. Duke Energy Economic Development, Indianapolis
  5. Duke Energy Economic Development, Plainfield
  6. East Central Indiana Regional Partnership, Muncie
  7. Fishers Economic Development Dept.
  8. Grant County Economic Growth Council, Marion
  9. Harrison County Economic Development Corp., Corydon
  10. Hoosier Energy Economic Development Dept., Bloomington
  11. Indiana Economic Development Corp., Indianapolis
  12. Indiana Municipal Power Agency, Carmel
  13. Indianapolis Chamber of Commerce
  14. Indy Partnership, Indianapolis
  15. Jackson County Industrial Development Corp., Seymour
  16. Madison County Corp. for Economic Development, Anderson
  17. Noblesville Economic Development Dept.
  18. Northeast Indiana Regional Partnership, Fort Wayne
  19. Office of the Governor
  20. Shelby County Development Corp., Shelbyville
  21. Vectren Economic Development (utility), Evansville
  22. Whitley County Economic Development Corp., Columbia City

Kansas:

  1. Black Hills Energy, Wichita
  2. Go Topeka Economic Partnership

Kentucky:

  1. Bowling Green Area Chamber of Commerce
  2. Hopkins County Economic Development Corp., Madisonville
  3. Kyndle Economic Development for Northwest Kentucky, Henderson
  4. South Western Kentucky Economic Development Council, Hopkinsville

Louisiana:

  1. Baton Rouge Area Chamber
  2. Cleco Power, Crowley
  3. Entergy (utility), New Orleans
  4. Livingston Economic Development Council
  5. Louisiana Economic Development, Baton Rouge
  6. North Louisiana Economic Partnership, Shreveport
  7. Southwestern Electric Power Co., Shreveport

Missouri:

  1. Kansas City Area Development Council
  2. Kirksville Regional Economic Development Inc.
  3. Lincoln County Economic Development, Troy
  4. Missouri Partnership, St. Louis
  5. Moberly Area Economic Development Corp.
  6. Nodaway County Economic Development, Maryville
  7. Northeast Missouri Economic Development Council, Hannibal
  8. Springfield Area Chamber of Commerce
  9. Louis Regional Chamber

Michigan:

  1. Lansing Economic Area Partnership

Mississippi:

  1. Jackson County Economic Development Foundation, Inc. Pascagoula
  2. Mississippi Power, Meridian

North Carolina:

  1. Advantage West Economic Development Group, Fletcher
  2. Beaufort County Economic Development, Washington
  3. Charlotte Regional Partnership
  4. Davidson County Economic Development Commission, Lexington
  5. Duke Energy, Charlotte
  6. Greensboro Partnership Economic Development

New Mexico:

  1. Albuquerque Economic Development
  2. Mesilla Valley Economic Development Alliance, Las Cruces
  3. NM Partnership, Albuquerque

Nevada:

  1. Economic Development Authority of Western Nevada, Reno
  2. Henderson Economic Development Dept.
  3. Las Vegas Global Economic Alliance
  4. Nevada Office of Economic Development, Carson City
  5. Northern Nevada Development Authority, Carson City
  6. NV Energy, Reno

Ohio:

  1. Cuyahoga County Dept. of Development, Cleveland
  2. Greater Akron Chamber
  3. Greater Cleveland Partnership
  4. Jobs Ohio, Toledo
  5. Piqua Economic Development Dept.
  6. Team Northeast Ohio, Cleveland
  7. Tipp City Community and Economic Development Dept.
  8. Youngstown-Warren Regional Chamber

Oklahoma:

  1. Greater Oklahoma City Chamber
  2. Norman Economic Development Dept.

Oregon:

  1. Business Oregon, Eugene
  2. Confederated Tribes of the Umatilla Indian Res., Economic Dept., Pendleton
  3. Greater Portland Inc.
  4. Hillsboro Economic Development
  5. Klamath County Economic Development, Klamath Falls
  6. McMinnville Economic Development Partnership
  7. Port of Portland
  8. Southern Oregon Regional Economic Development, Inc. Medford

Pennsylvania:

  1. Altoona-Blair County Development Corp.
  2. Armstrong County Dept. of Economic Development, Kittanning
  3. Governor’s Action Team
  4. Greater Pittsburgh Chamber of Commerce
  5. Greater Reading Economic Partnership
  6. Penn-Northwest Development Corp., Mercer
  7. Pittsburgh Regional Alliance

South Carolina:

  1. Central South Carolina Economic Development, Columbia
  2. Myrtle Beach Regional Economic Development, Conway
  3. Oconee County Economic Development Commission, Walhalla
  4. Richland County Economic Development, Columbia
  5. Santee Cooper (utility), Moncks Corner
  6. Spartanburg County Economic Futures Group

South Dakota:

  1. Governor’s Office of Economic Development

Tennessee:

  1. East Tennessee Economic Development Agency, Knoxville
  2. HTL Advantage (Haywood, Tipton, Lauderdale), ED Coalition, Covington
  3. Knoxville Chamber
  4. Montgomery County Economic Development Council, Clarksville
  5. Nashville Area Chamber of Commerce
  6. Tennessee Economic & Community Development, Nashville
  7. Tennessee Valley Authority, Nashville
  8. Williamson County Economic Development, Franklin

Texas:

  1. Allen Economic Development
  2. Amarillo Economic Development Corp.
  3. Arlington Economic Development Dept.
  4. Athens Economic Development Corp.
  5. Austin Chamber, Economic Development Dept.
  6. Bastrop Economic Development Corp.
  7. Bay Area Houston Economic Partnership
  8. Bowie Economic Development Corp.
  9. Brownsville Economic Development Council
  10. Buda Economic Development Corp.
  11. Burleson Economic Development
  12. Burlington Northern Santa Fe Railway, Economic Development Dept., Fort Worth
  13. Cedar Park Economic Development
  14. CenterPoint Energy, Houston
  15. Copperas Cove Economic Development Corp.
  16. Dallas Regional Chamber
  17. Denton Economic Development
  18. DeSoto Economic Development Corp.
  19. Flower Mound Economic Development Dept.
  20. Fort Worth Chamber, Economic Development Division
  21. Frisco Economic Development Corp.
  22. Georgetown Economic Development
  23. Greater Houston Partnership
  24. Greater Irving-Las Colinas Chamber of Commerce
  25. Greater Waco Chamber Business Development
  26. Harlingen Economic Development Corp.
  27. Houston Port Region Economic Alliance
  28. Hutto Economic Development
  29. Katy Economic Development Council
  30. Kilgore Economic Development Corp.
  31. Kyle Economic Development
  32. Laredo Development Foundation
  33. Levelland Economic Development Corp.
  34. Lockhart Economic Development
  35. Longview Economic Development Corp.
  36. Lubbock Economic Development Alliance
  37. Matagorda County Economic Development Corp., Bay City
  38. McKinney Economic Development Corp.
  39. Midland Development Corp.
  40. Mount Pleasant Economic Development Corp.
  41. Nacogdoches Economic Development Corp.
  42. New Braunfels Economic Development
  43. Office of the Governor
  44. Oncor (utility), Dallas
  45. Pearland Economic Development Corp.
  46. Plano Economic Development
  47. Port of Houston Authority
  48. Richardson Economic Development Partnership
  49. Rio South Texas Economic Council, Edinburg
  50. Rockwall Economic Development Corp.
  51. Round Rock Chamber Economic Development Partnership
  52. Rowlett Economic Development
  53. San Antonio Economic Development Foundation
  54. San Marcos Partnership Economic Development
  55. Seguin Economic Development
  56. Southern Texas Economic Development Foundation, Beaumont
  57. Sugar Land Economic Development
  58. Team Texas, Austin
  59. Texas Economic Development & Tourism Dept., Austin
  60. Texas Secretary of State
  61. Victoria Economic Development Corp.
  62. Wichita Falls Economic Development

Utah:

  1. Cache County Chamber, Economic Development, Logan
  2. Economic Development Corp. of Utah, Salt Lake City
  3. Office of Economic Development, Salt Lake City
  4. Office of the Governor
  5. Ogden Community and Economic Development Dept.
  6. Weber County Economic Development Partnership, Ogden

Virginia:

  1. Fairfax County Economic Development Authority, Tysons Corner
  2. Hampton Economic Development
  3. Hampton Roads Economic Development Alliance, Norfolk
  4. Isle of Wright County Economic Development, Isle of Wright
  5. Office of the Governor
  6. Portsmouth Economic Development Dept.
  7. Roanoke Regional Partnership
  8. Rockingham County Dept. of Community Development, Harrisonburg
  9. Virginia Beach Economic Development
  10. Virginia Economic Development Partnership, Richmond
  11. Virginia Port Authority, Norfolk
  12. Virginia’s 2000 Business and Economic Development Alliance, Lynchburg
  13. Virginia’s Growth Alliance, Keysville
  14. Washington County Economic Development & Community Relations, Abingdon

Washington:

  1. Greater Spokane Inc.
  2. Port of Sunnyside
  3. Yakima County Development Association

West Virginia:

  1. Jefferson County Development Authority, Charles Town
  2. West Virginia Development Office, Charleston

A state-by-state tally is below:

Rank

State

Number of Organizations
1 Texas 62
2 Indiana 22
3 Arizona 18
4 Florida 17
5 Virginia 14
6 Missouri 9
6 Tennessee 9
8 Colorado 8
8 Ohio 8
8 Oregon 8
11 Louisiana 7
11 Pennsylvania 7
13 North Carolina 6
13 Nevada 6
13 South Carolina 6
13 Utah 6
17 Georgia 5
18 Alabama 4
18 Kentucky 4
20 New Mexico 3
20 Washington 3
22 Idaho 2
22 Iowa 2
22 Kansas 2
22 Mississippi 2
22 Oklahoma 2
22 West Virginia 2
28 Arkansas 1
28 Michigan 1
28 South Dakota 1
Total

247

One focus of this blog has been to address California’s difficult business environment.

Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow. Also, Joe has been a Keynote Speaker for more than 20 years – see A Speaker Throughout the U.S. and in Europe and Asia.

Two Reporters Walked Into a Bar ….

August 1, 2016

Well, not really. Two reporters moved from California to Texas and last week both of them wrote stories about companies moving to the Lone Star State.

Dallas Morning NewsIn the Dallas Morning News, Jill Cowan wrote a piece about how financial firms are shifting their business operations out of hyper-expensive New York City to “lower cost, more business-friendly environments.” Although Phoenix won the top spot, Dallas, San Antonio and Austin came in second, third and seventh, respectively, for financial services job growth in the 2008-2013 period. If you are in the financial services industry, this is an excellent story to read. See “Y’all Street: Could Dallas oust New York City as a global financial capital?”

Meanwhile, another former Californian, Katie Burke, reported on a high-growth software company, Rev-Ignition, relocating its headquarters from Ontario, Calif. to Texas. See the San Antonio Business Journal story “Payment software company relocates CA headquarters to San Antonio.”

My studies show that for many years Texas has ranked as the number one state to which California companies migrate.

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One focus of this blog has been to address California’s difficult business environment.

Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow. Also, Joe has been a Keynote Speaker for more than 20 years – see A Speaker Throughout the U.S. and in Europe and Asia.

A July 4th Message About How ‘Freedom’ Is Under Siege for California Businesses

July 3, 2016

Once in awhile I come across a business owner’s explanation of just how tough it is to run a commercial enterprise in California. I found one that amounts to “can’t-put-it-down reading.”

Ventura County RecreationThe writer, Warren Meyer, described conditions relating to the regulatory requirements, such as getting county permits, high unemployment insurance costs, concern over rising minimum wages, and the fact that all employee lawsuits against this multi-state company were in California.

I’ll let his words speak for themselves:

Normally, the closure of a business operation or division is not grounds for a celebration, but in this case I am going to make an exception. At midnight on December 31, I not only drank a toast to the new year, but also to finally getting all my business operations out of Ventura County, California.

Never have I operated in a more difficult environment. Ventura County combines a difficult government environment with a difficult employee base with a difficult customer base.

It took years in Ventura County to make even the simplest modifications to the campground we ran. For example, it took 7 separate permits from the County (each requiring a substantial payment) just to remove a wooden deck that the County inspector had condemned. In order to allow us to temporarily park a small concession trailer in the parking lot, we had to (among other steps) take a soil sample of the dirt under the asphalt of the parking lot. It took 3 years to permit a simple 500 gallon fuel tank with [the California Air Resources Board] and the County equivalent. The entire campground desperately needed a major renovation but the smallest change would have triggered millions of dollars of new facility requirements from the County that we simply could not afford.

In most states we pay a percent or two of wages for unemployment insurance. In California we pay almost 7%. Our summer seasonal employees often take the winter off, working only in the summer, but claim unemployment insurance anyway. They are supposed to be looking for work, but they seldom are and California refuses to police the matter. Several couples spend the whole winter in Mexico, collecting unemployment all the while. So I have to pay a fortune to support these folks’ winter vacations.

California is raising minimum wages over the next 2 years by $2. [Note: The actual amount was higher.] Many of our prices are frozen by our landlord based on past agreements they have entered into, so we had no way to offset these extra costs. At some point, Obamacare will stop waiving its employer mandate and we will owe $2,000-$3,000 extra additional for each employee. There was simply no way to support these costs without expanding to increase our size, which is impossible due to County regulations.

A local attorney held regular evening meetings with my employees to brainstorm new ways they could sue our company under arcane California law. For example, we went through three iterations of rules and procedures trying to comply with California break law and changing “safe” harbors supposedly provided by California court decisions. We only successfully stopped the suits by implementing a fingerprint timekeeping system and making it an automatic termination offense to work through lunch. This operation has about 25 employees vs. 400 for the rest of the company. 100% of our lawsuits from employees over our entire 10-year history came from this one site. At first we thought it was a manager issue, so we kept sending in our best managers from around the country to run the place, but the suits just continued.

Ask anyone in the recreation business where their most difficult customers are, and they likely will name the Los Angeles area. It is impossible to generalize of course, because there are great customers from any location, but LA seems to have more than its fair share of difficult, unruly, entitled customers. LA residents are, for example, by far the worst litterers in the country, at least from our experience. Draw a map of California with concentric circles around LA and the further out one gets, the lower the litter clean-up costs we have. But what really killed it for me in Ventura County was the crazy irresponsible drinking and behavior. Ventura County is the only location out of nearly 200 in the country where we had to hire full-time law enforcement help to provide security. At most locations, we would get 1 arrest every month or two (at most). In Ventura we could get 5-10 arrests a day. In the end, I found myself running a location where I would never take my own family.

And so I got out. Hallelujah.

PS – People frequently talk about taxes in California being what makes the state “anti-business.” That may be, but I guess I never made enough money to have the taxes really bite. But taxes are only a small part of the equation.

Update: Wow, reading this again, I left out so much! An employee once sued us at this location for harassment and intimidation by her manager – when the manager was her sister! It cost me over $20,000 in legal expenses to get the case dismissed. I had an older couple file a state complaint for age discrimination when they were terminated – despite the fact that our entire business model is to hire retired people and the vast majority of our employees are 70 and older. And how could I have forgotten the process of getting a liquor license? I suppose I left it out because while tedious (my wife and I had to fly to California to get fingerprinted, for example), it is not really worse than in other places – liquor license processes are universally bad …. We gave the license up pretty quickly, when we saw how crazy and irresponsible much of the customer base was. Trying to make the place safer and more family friendly, we banned alcohol from the lake area, and faced a series of lawsuit threats over that.

Source: A Milestone to Celebrate: I Have Closed All My Businesses in Ventura County, California

Note: It’s irrelevant that this piece was written more than two years ago because since then the business environment in California has gotten worse.

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One focus of this blog has been to address California’s difficult business environment.

Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow. Also, Joe has been a Keynote Speaker for more than 20 years – see A Speaker Throughout the U.S. and in Europe and Asia.


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